We had the price of our petrol hike up as high as 40% yesterday, and we will expect an increase of electricity tariff around 25%. Many more cost rises to come.

Malaysian Trade Union Congress is urging that private sector employers to give their workers a salary increase up to 15% or cost of living allowance in view of the higher price of petrol and diesel. The point is can the private sector afford it? They too are looking at ever-rising costs

Instead of looking at your employers to save you from this ever rising cost of living, perhaps we have to learn how to “save” ourselves:-

1. Plan our monthly income and expenses, make sure we don’t overspend especially for those who rely heavily on plastic money

2. Cut down the unnecessary expenses, like cigarettes, movies, pub drinking. Well, if you were to notice, I merely say we should cut “down” and not “cut out”. I think it would be miserable if we only devoted our time in working and go completely without any form of entertainment to lighten up our days

3. Try to car pool whenever possible. This helps us to save petrol, save parking and save toll too. Did I not mention it will help save the world less air pollution as well

4. Ultimately, try to earn more. We have 600 agents registered as UT agents within this months, I guess this could be part of the motivation force! There are indeed many good income earning choices for us to choose from, if we are desperate enough

Anyway, here is a light-hearted advert I came across.., do a rough count, and yes, we are looking at roughly 40% increase of all the necessity consumer products for the last one year. Who would believe our inflation rate was less than 5% a year?

In my last post, I talked about how financial freedom can be achieved with certain steps. I thought perhaps I can share with you the steps I am taking. Please excuse me for there are really not any special formula, but they are in fact so simple and have made perfect sense to me. The only requirement, as far as I am concerned, is the willingness to “postpone” the enjoyment later.

I look back all these years, started from an income as little as S$ 1,600 per month back in 1996, with hardly any spare cash to save after deducting the necessary monthly expenses, I would say I have done well by sticking to these steps. Of course having a husband with the same mentality and passion helps 🙂

Basically, to accumulate wealth over time, I merely follow these steps, slowly and steadily:

1.First make it. Before I can begin to save or invest, I surely need to have a long-term source of income that’s sufficient enough to have some left over after I’ve covered my necessities. So if I’m ever stuck in a job that do not provide me sufficient funds, I will do something about it. That explains why I quit my first job. I am not suggesting job hopping here but practically we do need to find a job that pays well enough, even if it means to completely change the job nature. Jumping out of comfort zone is never an easy decision to make, but if the comfort zone is leading us financially no where, how comfortable can it be to us and to our family? Make sense?

2.Save it. Once I have an income that’s enough to cover my basics, I started to develop a proactive savings plan in a disciplinary way. I find having 2 saving accounts helps. One is meant for spending, and the other for saving. For the ‘saving’ account, the ATM card was never with me when I went out so no opportunity when the temptation arises to withdraw from here. I made sure I could perform on-line money transfers from one account to another within minutes to avoid any room of excuses to hinder the saving process. I will leave just enough for each month budgeted spending in the “spending” account. The lesser the amount I see in my bank account, the lesser the desire I have to spend on the unnecessary. It works perfectly for me for the past 12 years.

3.Invest it. Once I was able to set aside 3 months worth of living expenses that could prepare me for financial setbacks, I started to invest it prudently. I can still remember the feeling of joy when I made the little profit (S$ 150+) of my first lot of share back in 1997. I don’t think S$150 will excite me that much now though. 🙂 Till date, we (my husband and I) have our investments spread in share, unit trust, land and properties. Well, the choice of investment is very subjective according to individual risk appetites, time horizon, cash flow/liquidity needs and any other factors that are unique to each individual. By understanding our portfolio needs, we can then determine the appropriate asset allocation. Whatever choices we choose, it is for sure that we have to invest! I have never seen anyone who achieve financially free without involve in any form of investment.

4.Create stream of passive income. I have talked about passive income in my last post. Since I am made aware of the term passive income, I found myself having little interest in any job that failed to provide me with this income. The idea of passive income is far more exciting over earned income. I was working very hard while I was in Singapore. I was promoted from Financial Manager to the General Manager of the company. The experience gain and the sense of self-achievement is priceless. However, once I quit from the company, the effort that I put in all these years earn me nothing more than what I was paid then. Wouldn’t it make more financial sense if I will be continually paid for the effort that I made then, today. Would it make more financial sense instead of having cash, I have cash flow instead? I can deplete my cash (saving), but I can’t deplete my cash flow because its constantly flowing in even when I stop working.

So, what’s next? I will say applying it – to think about how to first make enough so that you can save enough to invest. If it requires you to do part time job, and if you are able, why not?

How could you create your cash flow by generating passive income. There really are so many ways you can create your own passive income if you look out for it.

The sooner we answer these questions, the sooner we’ll have financial and personal freedom.